Industrial Strength: One sector that keeps hanging around is Industrials. Personally, I just feel bad for the guy hanging upside down. But many people find value in these patterns when trying to project future growth. You could ask several technicians about a pattern and likely get several answers on where to draw the lines or set the target. In this specific case, the SPX must clear resistance at the 4530 level before it can reach its target.Īlso, price patterns are open to interpretation. The security doesn’t always reach its target, or it just consolidates. There are a couple of issues with this and with every pattern.
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Many technicians will use the distance from the bottom of the head to the neckline and then add that number to the neckline to create a short-term price target. The last shoulder just recently completed when a higher low formed on October 13, and the price broke the 4450 “neckline” a couple of days later. Then the head formed around the first of October with the lower low. The first shoulder formed near the end of September. With a little imagination you can see it in the chart. What I do have are friends that like to analyze charts, and some see an inverse head and shoulders forming in the S&P 500 (SPX).
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Head Over Heels: I’m not much of a technical analyst, and I don’t even try to play one when I’m on TV. Data Sources: ICE, S&P Dow Jones Indices. The pattern is considered by technical analysts to be bullish. shoulder of an inverse head and shoulders pattern. The S&P 500 (SPX-candlesticks) appears to have completed the final. These groups may continue to do well if supply chains, worker shortages, and energy crises in Europe and China fester.ĬHART OF THE DAY: UPSIDE DOWN. A more fluid supply chain could provide a clearer picture on what inflation is transitory and what is more permanent.Įither way, inflation continues to be an important factor driving the markets, which is one reason that Energy, Materials, and Financials sectors have performed so well. Stores could then restock their shelves, and manufacturers could replenish their inventories. Weaker retail sales could alleviate some of the pressure on cramped supply chain and labor shortages. Many economists would like to see weaker retail sales and a consumer shift to services. The report focuses on nominal numbers and didn’t adjust for inflation, so using the report as a measure of demand is a little distorted. Stronger sales are a good sign for economic growth, but part of the gains can be attributed to inflation. On the other hand, the bond market did react, and the 10-year Treasury Yield (TNX) rallied more than 2.8%. However, the stock futures reaction to the number was muted. Retail Sales report was much stronger than expected.
Sandvik is up more than 2% before the open. Industrials stock Sandvik (SDVKY) also beat analysts’ estimates on both top and bottom line numbers. The company also increased its dividend by two cents per share. Grocery chain Albertsons (ACI) rose 5% in premarket trading after beating analysts’ estimates on revenue and earnings.
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In earnings news, State Street (STT) picked up where some of the other Financial stocks left off last week, by announcing better than expected earnings and revenue.